Discuss in detail the form of business ownership that you would recommend for Luke's business. Justify your answer.

I would recommend that Luke forms a partnership.

"These are unincorporated associations and the rules that govern them were established in the partnership act of 1890. A partnership does not have a separate existence from its members. The number of partners can range from two to twenty.The partners provide the finance for the organisation, and the profits and losses will normally be shared in an agreed proportion depending on the individual's contribution to the partnership.

Partners have unlimited liability: each partner is jointly liable with the other partners for any debt. Like sole traders, there is no legal obligation for partners to publish their accounts. Well-known examples of partnerships occur in the professions, such as solicitors, accountants and estate agents." 

There are many factors that prevent him from forming a sole proprietorship and some factors the support the idea that he should form a partnership. If he were to start by himself, he may fail the business before he even could get started. Firstly he has no knowledge of business and will only have a Degree in Information Technology once he graduates from university. Therefore he would understand very little of how to run a business properly and this would ensure, almost absolutely that his business will end up in ruins. Furthermore, he has a roommate that will graduate and the same time as him and will be receiving a Degree in Business. This is a good chance for Luke as his roommate is willing to start up an enterprise and put his Business skills to good practice. Having a partner like him would ensure better chance at success and less stress as one can manage the services and what else is offered to the customers while the partner with the business degree can handle all the financial and business related problems of the company.

Partnerships are very simple to manage and simple to form and they also lack legal requirement. Many of the business liabilities although unlimited are split between partners causing less pressure on the partners. Having a person in the business that knows about the industrial world would definitely know how to draw in customers that they are aiming towards. Luke also has a problem as he does not have enough funds to get the business started consequently having a partner would help reduce the investments. Rather than paying all of it himself, the funds could be divided and the profits can be split accordingly to the amount of money and work they put in to the company or any percentage the both of them would agree on, on their partnership deed.